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> To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). You're assuming t
by nybble41 7y ago
> To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization).
You're assuming that the debt is backed by labor and involves a commitment to perform some specific service. Such promises are generally considered unenforceable as the capacity for future labor is inalienable, at least in societies which don't permit slavery or indentured servitude. At best you may be able to claim some property in compensation if the service is not performed. How is an indirect claim on someone else's gold or other property "far superior" to actually possessing it yourself? Sure you save a bit on the cost of storage, but in exchange you add the potential for non-payment.
> An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as the debt is not paid - i.e. the kid does the work and the IOU is destroyed - that piece of paper circulates through the neighborhood. It has real value (actual work).
And if the kid proves unable or unwilling to do the work, what becomes of the value of the IOU? Repayment is not the only event that can take an IOU out of circulation. Better to have a claim on, or better yet possession of, a valued and marketable commodity than a mere promise of future services from a specific human being who could die, become disabled, or simply choose to dispute or repudiate the terms of the IOU.
- nosianu 7y ago> You're assuming... You are assuming absolutes. The universe does not have any guarantees. I'm being relative. In relative terms debt-based currency is more than you get from something far more arbitrary, like gold. Of course, here the argument depends on how fixed and static you see the basis of the mass-psychology based "value" of gold. If humans stop cooperating, the very basis of human society, you've got bigger issues than a currency standard. If they only stop valuing gold there is no problem at all really, except of course for those who relied on it somehow magically remaining "valuable" (based purely on psychological reasons).
- nybble41 7y agoI am not assuming any absolutes. Gold just currently happens to be a marketable commodity with a long history of stability—far more so than promises of labor. Obviously that could change. If you don't care for gold, substitute any other marketable commodity. Gold could lose all value if everyone, including the owner, stopped demanding it, including for industrial use and jewelry. There is no precedent for such an event but it is indeed a possibility. A promise of labor, on the other hand, can lose all value if just one particular person chooses to renege on the agreement or is rendered unable to fulfill the IOU. That sort of thing happens all the time.